Go to:

July 2018
< Jun Aug >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

George Mason U. Mercatus Center: CFPB Arbitration Study is Flawed
Friday, August 14, 2015 6:40 AM

The Dodd-Frank Act requires the Consumer Financial Protection Bureau to provide Congress with a report on the use of arbitration agreements in disputes between consumers and providers of consumer financial products. After CFPB issued its final report to Congress in March, two law professors at the Mercatus Center at George Mason University provided an overview and critique.

Jason Scott Johnston and Todd Zywicki criticize the report using primarily evidence supplied by the report itself. They say CFPB’s findings show that arbitration is relatively fair and successful at resolving a range of disputes between consumers and providers of consumer financial products, and that regulatory efforts to limit the use of arbitration will likely leave consumers worse off. Moreover, the authors say, owing to flaws in the report’s design and a lack of information, the report should not be used as the basis for any legislative or regulatory proposal to limit the use of consumer arbitration.

The authors suggest the tone and conclusions of the report indicate that the CFPB intends to aggressively regulate arbitration agreements in consumer credit contracts and could also implement an outright ban on mandatory arbitration clauses.

To read the study in its entirety and learn more about its authors, see “The Consumer Financial Protection Bureau’s Arbitration Study: A Summary and Critique.”